The European Court of European Justice has opened the door, in its recent sentence (sentence C/788-19), for the self-employed appeal the amount of the fines they have paid in relation to the erroneous presentation of form 720, or, that demand compensation for the damages caused.
Declarando, the platform for tax advice to the self-employed, in its latest issue of its Legal Observatory explains that the ruling is final and allows the self-employed to make decisions about declaring their assets abroad, which until now they had not been able to do, for the severity and disproportion of the sanctioning regime described.
According to the ruling, the situations that could be claimed have to do with self-assessments of personal income tax or corporate tax presented and not prescribed in which the regulations that have become null have been applied. Also, it extends to sanctions imposed by the AEAT; the procedures for the application of taxes and litigation in progress; the regularization of undeclared elements in the 720 form, and the possible recovery, in some cases, of regularized debts that have become firm, due to patrimonial responsibility of the State.
The situations affected by this change are related to self-assessments of personal income tax or corporate tax, but they are directly about the sanctions imposed by the AEAT in relation to model 720.
“The self-employed with open appeals for these sanctions, those who have never appealed their fines and those who appealed it a long time ago, but the Court dismissed it, now have the possibility of appealing. In each case, the procedure will be different, adjusting to the specific characteristics of each case.”, explains Marta Zaragozá, CEO of Declarando, in a new installment of the Legal Observatory.
“Disproportionate and excessive” sanctions
Until now, model 720 penalized disproportionately and excessively, according to the CJEU, to the self-employed who made a minimum error in their presentation. In recent years, any foreign assets not properly declared were subject to a 150% penalty or lump-sum fines, which were out of proportion to the penalties provided for similar offences.
The ruling of the European Court considers that the EU regulations have been breached, so forces Spain to make changes to these procedures, sanctions and impositions before March 31, 2022.